Medicare improperly paid $120M to ineligibles

Illegal immigrants and prison inmates received more than $120 million in Medicare services from 2009-2011 despite federal law that makes them ineligible for the program, according to two new reports from the HHS inspector general.

The issue, according to the reports, is timing. When Medicare is alerted that someone is incarcerated or undocumented, its contractors help prevent payments from going out the door. But often, Medicare’s databases aren’t up to date, and improper payments go out.

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Nearly 3,000 illegal immigrants made thousands of claims resulting in $91.6 million in services improperly covered by Medicare during the three-year period studied in the report.

Over the same period, more than 135,000 Medicare beneficiaries were incarcerated, a second report shows. The report says that 11,600 inmates submitted more than 75,000 claims and received services worth $33.6 million.

“CMS did not have policies and procedures to review incarceration information on a post-payment basis that would have detected improper payments that the prepayment edit could not prevent,” according to the report.

In responses to the reports, CMS agreed to identify improper payments and find ways to try to get the money back in the future, but the agency stopped short of pledging to go after the money already improperly out the door.

“CMS stated that it is committed to recovering overpayments we identified, but it must take into account the cost-benefit of recoupment activities, including potential appeal costs and the cost of manually reopening these claims,” according to the report.

This article first appeared on POLITICO Pro at 12:38 p.m. on January 24, 2013.